WARRANTS

Stock warrants and Covered warrants are securities, which entitle their owner to acquire shares in listed or unlisted companies, at his discretion and on pre-agreed terms. They are widely recognised as complex financial instruments, encompassing high leverage, amplified investment risk and asymmetric returns. The book examines in detail the legal and contractual nature, characteristics and regulation of warrants, in the context of greek law, European Union legislation and international corporate finance practice. Meaningful observations are drawn in reference to the case study of special warrants enacted for the recapitalisation of greek systemic banks (2013), as well as from the draft general provisions on stock warrants in the proposal for greek company law reform, selected international law rules, contemporary warrant agreements and comparative jurisprudence. Analysis comprises corporate actions for warrants issuance, the warrant contract architecture, exercise, transfer and call of warrants. It further extends to defective warrant issuance, offering and agreement performance, legal remedies available to warrant holders and resolution mechanisms regarding major conflicts of interest, which normally arise among shareholders, warrant holders, directors, bondholders, creditors and other stakeholders, in the course of long term company developments and strategic decisions. Admission of warrants for trading in regulated securities markets magnifies their advantages for issuing companies and contributes to market efficiency, while also necessitating additional safeguards to achieve market integrity and investors’ protection. Research considerations and conclusions progressively shape a coherent legal and regulatory framework, which is necessary for the promotion of stock and covered warrants and their exploitation, so as to achieve their intended objectives as investment tools, particularly in the context of (start-up, mature or failing) public or private companies’ staged financing, recapitalisation or even state-aided bail-out.